1031 Exchange-55-Unit C-Class Apartment w/ Heavy Rehab

[Mike Vann]

Investment Info:

Large multi-family (5+ units) commercial investment investment.

Purchase price: $1,475,000
Cash invested: $400,000

We completed a 1031 exchange to purchase the property and completed a heavy lift, $8k/door, rehab and tenant reposition on this property.

What made you interested in investing in this type of deal?

I wanted to scale my personal portfolio. This deal provided a high ROI potential and good cashflow and I was able to use tax free 1031 funds to purchase.

How did you find this deal and how did you negotiate it?

I found this deal through a REI Facebook group

How did you finance this deal?

Commercial Loan from my community bank.

How did you add value to the deal?

We completely remodeled the unit interiors w/ new appliances, counters, plumbing/lighting fixtures, doors w/ hardware, and vinyl plank flooring as well as installing new vinyl windows in every unit. We improved the amenities by extending the pool deck, adding a large pergola, bought new pool furniture, and added a grilling/seating area. We also remodeled the office and laundry areas. We improved operational efficiencies by adding 3rd party management and repositioned the tenant base.

What was the outcome?

This property is stabilized and producing great cash flow and providing double digit returns.

Lessons learned? Challenges?

This was my first larger MF deal and I learned a lot about property management and large scale rehabs through the transition/reposition of the asset and tenant base.